Just watched Die Hard and in the film the excellent antagonist Hans Gruber is trying to steal over $600 million in German bearer bonds from the Nakatomi corporation. It occurred to me that I have no idea what they are or why a company would have them.
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In order to understand what a “bearer” bond is, first we need to understand what a “bond” is.
A bond, generally, is a debt instrument — it represents a certain amount of money that has been loaned to a company, usually if the company needs to raise money to fund its activities or its expansion. The company promises to pay back the money it borrowed, plus a little extra — this extra is known as the bond ‘coupon.’
A “bearer” bond is unique in that no registration of ownership exists in the company’s ledgers; whoever bears the bond — that is, whoever physically has the piece of paper — is the presumptive owner of the bond and may claim it.
So, if Hans Gruber can steal over $600 million in bearer bonds, he can then go to the company, redeem the bonds, and be $600 million richer. Because they’re bearer bonds, the company has no way to say Gruber isn’t the rightful owner and isn’t owed the money.
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